SHRI SUNIL KUMAR BHATIA,DELHI vs. ITO, NEW DELHI

This appeal by the Assessee is filed against the order dated 09.12.2014 of Ld. CIT(A)-12, New Delhi, for Assessment Year 2003-04. The grounds of appeal are as under:-

“i. The Ld. CIT(A) has erred on facts as well as in law in confirming the penalty for concealment in respect of loans inspite of the fact that the Appellant has discharged his onus by filing confirmation, the transactions are through

ITA No.-1729/Del/2015. Sh. Sunil Kumar Bhatia. bank, the Creditor is regular assessee and the Department did not enforce attendance of the Creditor inspite of request having been made, nor did they make any enquiries about the assessment ward of the Creditor or from the Creditor.”

(1.1) In this order, the following abbreviations have been used:

Assessing Officer as AO Commissioner of Income Tax Appeal as CIT(A) Departmental Representative as DR Dated as dtd. Income Tax Act as I.T. Act Income Tax Appellate Tribunal as ITAT Learned as Ld. Under Section as U/s (2) The Assessee claimed to have received two loans, amounting to Rs. 5,00,000/- and Rs. 4,00,000/- from Sh. Vijesh Kumar Gupta (HUF) and Sh. Shaym Gopal & Sons (HUF) respectively. The AO did not treat these loans of the total amount of Rs. 9,00,000/- as genuine. Assessment order dated 24.12.2007 U/s 153A of I.T. Act was passed wherein an addition of Rs. 9,00,000/- was made on account of unexplained loan. Vide order dated 14.06.2013, Ld. CIT(A) confirmed the aforesaid addition of Rs. 9,00,000/-. Penalty U/s 271(1)(c) was levied by the AO vide order dated 27.09.2013, amounting to Rs. 2,82,633/-, in respect of the aforesaid addition of Rs. 9,00,000/-.

The aforesaid penalty U/s 271(1)(c) of I.T. Act was confirmed by the Ld. CIT(A) vide order dated 09.12.2014. The Assessee filed appeal in Income Tax Appellate Tribunal (ITAT) against the aforesaid order dated 09.12.2014 of the Ld. CIT(A) in which the quantum appeal of Rs. 9,00,000/- was confirmed: and also against the aforesaid order

ITA No.-1729/Del/2015. Sh. Sunil Kumar Bhatia. dated 14.06.2013 of Ld. CIT(A) in which the penalty amounting to Rs. 2,82,633/- U/s 271(1)(c) of I.T. Act was confirmed. Vide order dated 14.09.2018 of ITAT in the aforesaid quantum addition of Rs. 9,00,000/- was deleted by ITAT.

Now, the present appeal before us is in respect of the penalty U/s 271(1)(c) of I.T. Act.

(3) At the time of hearing before us, the Ld. Counsel for Assessee submitted at the outset, that the aforesaid penalty of Rs. 2,82,633/- levied u/s 271(1)(c) of I.T. Act, in respect of the aforesaid addition of Rs. 9,00,000/- should be deleted because the quantum addition of Rs. 9,00,000/- in respect of which the penalty was levied has already been deleted by ITAT vide order dtd. 14.09.2018 in ITA No. 1669/Del/2018.

Revenue was representative by Ld. Departmental Representative, relied on the order of the lower authorities namely AO and CIT(A).

(4) As the aforesaid quantum addition of Rs. 9,00,000/- has already been deleted by ITAT vide aforesaid order dtd. 14.09.2018 in the penalty of Rs. 2,82,633/- levied by the AO in respect of this addition has no legs to stand. This penalty was levied by the AO on the ground that the assessee had sought to evade tax on the aforesaid amount of Rs. 9,00,000/-. Once this addition of Rs. 9,00,000/- has been deleted by ITAT, it stands excluded from assessed income; and, consequently no such assessed income remains, on which the allegation that the assessee sought to evade tax, survives. As the assessed income as a result of the aforesaid order dtd 14.09.2018 is not to include any income on which the assessee can be said to have sought to evade

ITA No.-1729/Del/2015. Sh. Sunil Kumar Bhatia. tax; the impugned order of Ld. CIT(A) confirming the penalty U/s 271(1)(c) of I.T. Act is hereby set aside, and the penalty of Rs. 2,82,633/- U/s 271(1)(c) is hereby deleted.

(5) In the result, appeal of the Assessee is allowed.

Order pronounced in the open court on 23/10/2018